Stock Views on Orchid Chemicals, Nestle India, Axis Bank

Angel Broking on Orchid Chemicals - Target Rs 110

Angel Broking is bullish on Orchid Chemicals and has recommended a buy rating on the stock with a target of Rs 110 in its report.

"Orchid has been an underperformer on the bourses on account of delays in receiving approvals for its high-Margin products, which resulted in higher Debt burden. However, now having received approval for Tazo+Pip in the EU and likely approval for the product in the US in 2QFY2010, we believe the product pay-off has begun for the company. Nonetheless, we have pruned our FY2011E Earnings estimates by 13.3% post increase in the MAT rate in the recent Union Budget from 10% to 15% as the company does not claim the MAT credit."

"On the valuation front, the stock is trading at 5.3x FY2011E Adjusted Earnings and 1.3x FY2011E EV/Sales, which we believe discounts the high debt on the company's Balance Sheet and delays in receiving approvals for its key products. Hence, we recommend a Buy on the stock at 7x FY2011E Adjusted Earnings with a revised Target Price of Rs 110 (Rs 136). At our Target Price the implied EV/EBITDA stands at 5.7x and EV/Sales at 1.4x FY2011E, which is much below its historical average of last 4 years of 12.1x and 2.6x, respectively," says Angel Broking's research report.

Hem Securities on Nestle India - Target Rs 2500

Hem Securities has recommended a buy rating on Nestle India with a target of Rs 2500 in its report

"Nestle India has reported excellent results for Q1FY09. The net sales surged from Rs 10932.60 million in the same quarter last year to Rs 12707.80 million this quarter depicting an increase of 16.24%. This also resulted in an increase in the operating profit to Rs 3041.00 million showing a growth of 25.97% from Q1FY08. The net profit of the company increased by 23.20% to Rs 1973.00 million. We are positive on company’s long term prospects. The company has earned the trust and respect of every strata of society that it comes in contact with and is acknowledged amongst India's 'Most Respected Companies' and amongst the 'Top Wealth Creators of India'. Based on the positive financial performance reported by the company, we recommend 'BUY' on the stock with a medium term price target of Rs 2500, “ says Hem Securities' report.

Prabhudas Lilladher on Axis Bank - Target Rs 880

Prabhudas Lilladher has maintained its accumulate rating on Axis Bank with a target price of Rs 880 in its report.

"Asset quality risks from corporate loan restructuring are a sector wide risk. Hence, we need to be selective and invest in those banks which will be able to absorb these shocks and still deliver reasonable earnings growth. We remain confident that Axis Bank is capable of delivering a 25-30% CAGR in earnings over FY09-11E. At the CMP of Rs 756, the stock is quoting at 9x FY11E EPS, 1.8x FY10E BV and 1.9x FY11E ABV. We continue to favour Axis bank from a medium-to-long term perspective. Maintain our Accumulate rating with a revised price target of Rs 880 (rolling over to FY11E)," says Prabhudas Lilladher's research report.